Bumper pay rise for BNZ boss

PAY RISE: BNZ boss Andrew Thorburn's pay packet grew by two thirds this year to A$3.1 million (NZ$3.9m).

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Bank of New Zealand boss Andrew Thorburn's pay packet grew by two thirds this year to A$3.1 million (NZ$3.9m).

In the previous year, Thorburn's total salary package including performance benefits and share options was A$1.9m. Thorburn has helmed the BNZ since 2008, and has held banking roles across Australia and New Zealand throughout his career.

At the end of last month the Australian-owned bank reported a near record $741m profit in the year to September.

He defended the level of profit that the big banks have been making in a speech last week delivered to the Trans-Tasman Business Circle.

"Some of the recent news media and political commentary on bank profits have been misleading, lacking perspective and straight-out wrong in places," he said.

He highlighted BNZ's economic contribution to the country and pointed out that banking would be more expensive without the strong AA credit rating.

"If you are a bank customer, and just about all adult New Zealanders are, you have never had more choice, or more of a clamour for your dollar."

Thorburn also reflected on how New Zealand as a country could improve its finances. He identified worries such as high unemployment, the "persistently stubborn" current account deficit and housing affordability.

"If we could be better with money as a nation, I think we could face up to and overcome a lot of these issues."

Thorburn criticised the tax structures that have fed the appetite for investment in housing, rather than the productive sector.

Those included a lack of capital gains tax, the support of negative gearing and no stamp duty on property purchases.

Almost half of BNZ's lending book is supported by that very same demand for residential housing.

"If New Zealand and New Zealanders are to be good with money I do think we need to take a different path and face up to these fundamental anomalies at the heart of our current taxation system," said Thorburn. "Let's keep debating this, please."